Bosses at Sensyne Health (Sensyne) are now plotting the company’s departure from the London Stock Exchange, according to The Telegraph.
The AI-powered health technology specialists, founded by Labour peer Lord Drayson, are now pursuing a management buyout or outright sale amid deepening financial issues.
Sensyne’s value crashed to less than £30m this month, following a tumultuous journey on the FTSE AIM All-Share.
Money has been running out over recent months with investors agreeing in principle to £6.4m in emergency fundraising, with the potential for a further £5m.
This follows warnings from the board that without an emergency cash injection, the company would be unable trade beyond early February 2022.
Its shares had plummeted 8.11 per cent at close of play on Friday, trading at 17 pence a share.
The developments reflect a sharp downturn in fortunes for the company, which was initially valued at £225m when it launched on the stock exchange in 2018, going public with multiple NHS trust deals under its belt.
The trusts’ data seemed to present the company in a very strong position, as it provided the firm with records for Sensyne’s AI tools to anonymously analyse and feed to medical companies to boost their research capabilities.
This included agreements with with Cambridge University Hospitals NHS Foundation and Oxford University Hospitals NHS Foundation Trust, gaining access to anonymised patient information in exchange for equity in the business.
Revenue has been slower than expected as contracts with life sciences companies that could use the medical data have been riddled with complications, while sources company have also The Telegraph that poor NHS IT infrastructure has hindered its attempts to get a good flow of data.
The company has further suffered from its limited domestic scope, with activist investor Gatemore urging the board last summer to conduct a dual-listing to boost its investor base.
The company has also suffered from focusing on a few deals which were difficult to predict.
These factors have all contributed to rising costs and insufficient revenue streams, with Sensyne racking up £28m in pre-tax losses in its last financial year.
Investors have also reportedly been at loggerheads with management, which has worsened the company’s troubles.
In particular, Sensyne’s decision to hand a £850,000 bonus to Lord Drayson and a £200,000 payout to chief financial officer (CFO) Lorimer Headley four months after its initial float riled investors, especially as both payments were were not disclosed to investors in the listing documents.
Ultimately, in November 2021, Sensyne was handed a £400,000 fine from the LSE over the bonuses.
The company struggled to rebuild relationships with investors, and its reputation was further damaged following accusations of a “culture of fear” by Headley, who had departed as CFO.
While an independent investigation found the allegations were “not supported by the evidence”, the case cost Sensyne £1.1m, due to legal fees and a settlement deal.
Sensyne’s future direction is not year clear, with months of talks with potential buyers already having taken place.
However, the emergency funding has provided the company with some breathing space to assess its options amid mounting pressure.